Inco bid battle may see Brazilian giant enter the fray; Apple slides

LONDON (MarketWatch) -- U.S. stock futures flattened out Friday, as optimism over the previous session's strong showing was tempered by uncertainty over the need for financial restatements at Apple Computer and the outlook for inflation following stronger-than-anticipated economic data.

U.S. stocks closed higher in light volume Thursday, as investors cheered the fact that U.K. authorities had apparently thwarted a terror plot to blow up U.S.-bound flights, with an accompanying decline in oil prices underpinning gains. See full story.

The Dow industrials rose 48 points, and other stock market indexes also rose on Thursday.

Crude-oil futures were back on the rebound Friday, rising 47 cents at $74.47 a barrel. The International Energy Agency said the market could cope with BP's production problems in Alaska but added there wasn't much of a supply cushion.

On the data front, U.S. retail sales increased at the fastest pace in six months in July, rising 1.4% on higher auto and gasoline sales, the Commerce Department reported Friday. Excluding autos, retail sales increased 1%. The figures were higher than expected on Wall Street, where economists surveyed by MarketWatch were reckoning on a gain of 0.8% for retail sales and a 0.5% increase in sales excluding autos.

Of companies in focus, Brazilian mining company Companhia Vale Do Rio Doce
RIO, -2.30%
said it was going to launch an all-cash C$17 billion ($15.1 billion) bid for nickel miner Inco Ltd.
N
A CVRD bid would create a three-way battle for Inco, which has also received offers from Teck Cominco
TCK
and Phelps Dodge Corp.
PD, -2.70%See full story.

Inco shares gained 2.4% to $78.38 in pre-open trading on Inet.

Apple Computer
AAPL, -1.44%
shed 1.3% to $63.26 on Inet after saying that it was unable to files its quarterly report for the quarter ending July 1 on time as a result of an ongoing internal investigation into the accounting of past stock option grants.

The company said that it was likely that it would have to restate past financial statements, and that it expects "significant" changes in results, including increases in revenue and expenses.

Graphics chip maker Nvidia
NVDA, -3.38%
slumped 7.9% to $22.25 on Inet after saying late Thursday that it delayed its quarterly report after the company found problems with the accounting for some past stock-option grants. The news overshadowed strong revenue results. See full story.

Juniper Networks
JNPR, -3.99%
which also said late Thursday that it missed the filing deadline for its quarterly report, and said it would need to restate past results, lost 2.4% to $12.59 on Inet.

Parlux Fragrances
PARL
tumbled 34% to $5.40 after saying late Thursday that it would need extra time to file its quarterly report.

Business Week's "Inside Wall Street" column says there's renewed market buzz going around that UAL Corp.
UAL, -0.82%
and Continental Airlines Inc.
CAL, +1.38%
might make for a good merger, particularly from the strategic standpoint of international travel. UAL added 1.2% to $23.80 on Inet.

Pacific Sunwear of California
PSUN
shares slumped 5.9% to $14.25 after the casual apparel retailer said its net profit fell by more than half in the second quarter on a drop in sales at its stores open at least a year.

Deutsche Bank cut graphics chipmaker ATI Technologies
ATYT
which has agreed to be acquired by Advanced Micro Devices
AMD, -0.44%
, to hold from buy, saying it doesn't expect rival Intel Corp.
INTC, -1.40%
to make a competing bid. The broker told clients it believes Intel is more in an asset-sale mode than an acquisition mode and that ATI is less of a strategic fit for it than it is for AMD.

Overseas, the FTSE 100 in London edged 0.2% higher, with British Airways
BAB, -0.12%
recovering some lost ground.

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